Home ownership is a long, expensive process. It involves building a foundation and living up to expectations in order to receive a tax credit.
In order to qualify as home owner, the purchase must be from a licensed real estate agent and the property you are buying must be your primary home for at least one year before moving in.
If you are planning on changing homes soon, you will need to purchase new insurance and/or Term Insurance upon sale of new home.
Who is eligible?
First time home buyers who can demonstrate a financial need cannot receive the tax credit if their home is owned by a government agency. Only the homeowner can receive the tax credit.
Home buyers who have spent a substantial amount of their money buying and/or renting a residence in the past few years cannot receive the tax credit due to strict regulations on ownership. However, they may be able to claim other forms of assistance such as housing assistance or rental subsidies.
The amount of the tax credit an individual can claim for depends on how much house they purchase. The more house you buy, the less money you will get per month in taxes and insurance bills.
How much can I qualify for?
The first time home buyer tax credit is currently set at $2000 for a family of four. This number can change depending on what property you purchase and how much you pay for it.
The second time home buyer tax credit is currently set at $500 for a family of four. This number can also change, as the amount of homes you purchase can. The maximum amount of credits you can receive is $12,000 per property!
If you are looking to buy a home, we suggest speaking to a real estate agent to find out if there are any special incentives needed. Most counties have an affordable housing council that can help with this.
Whether or not they need your help to qualify, the second time home buyer tax credit is very helpful when it comes to buying your first home.
What are the income limits?
When a homebuyer exceeds the income limits for a property, they can lose some of their tax credit. If the homebuyer needs to downsize in order to meet the income requirements, they can lose some of their tax credit.
To qualify for the tax credits, homes must be valued at least $500,000 and be located in a neighborhood with good public transportation. The neighborhoods must be relatively safe with good access to shopping and communities.
Homeowners have a limited number of times they may buy a property. Once they are finished buying their property, they must either re-apply for the tax credits or find another property that meets the criteria.
What are the asset limits?
First time home buyers can claim a tax credit of up to $5,000 for the purchase of a house, depending on their income.
As with all purchases, there are some restrictions and you must meet them to qualify for the tax credit. The biggest restriction for first time home buyers is on the value of their house.
Most homes are worth between $500 and $1,000, so a home value of $500 might not be enough to qualify for the tax credit.
The second restriction is on where the house can be located. Most commonly, first time home buyers can claim property in the neighbourhood where they live or where they want to live in proximity to their new house.
However, there are cases when an uninhabited lot or nothing but tree bark is enough to qualify as new property.
Do I need to own stock to qualify?
Although it is highly recommended that beginners into home ownership Stock up on essential household items like towels and cleaning supplies, it is not necessary to purchase any stock to qualify for the tax credit.
The tax credit is only for new home purchases and not second or third homes. Therefore, if you have a home outside of the US, you would need to purchase the property in order to receive the tax credit.
However, because this credit can make such a big difference in your budget, it is strongly recommended that you claim it as soon as possible. Because it takes so long for the FHA to process applications and send out checks, it can put a significant strain on your budget.
Can I use my spouse’s income if they do not have employment?
In order to eligibility for the credit, you must be the primary home-buyer. If your spouse is the secondary home-buyer, then their contribution to the purchase of the home is tax-free.
The credit is for half of the purchase price of a homes, not for rent or loans. So if your spouse purchased $200,000 worth of property, they would only receive $100,000 in tax credits.
However, if one spouse had a salary of $50,000 and the other had a salary of $100,000, then their combined tax credit would be $50,000!
This is because taxes are charged on both salaries. The government considers this an unfair advantage to one over the other and gives them both credits.hentaichiarticletexttextcanI use myspouse’s income if they donothave employment? CanI use my spouse’s income if they do not have employment? No! The credit does not apply to people who are unemployed. People who are working but not paying any taxes may still receive the tax credit.
What documents do I need to submit with my tax return?
As the first step in applying for a tax credit, you must present your income tax filing to the IRS. This is called filing a joint return or separate return if you also purchase and live in the house.
As part of your application, you will need to provide copies of all your receipts, savings accounts receipts, and mortgage documents. Your home equity line of credit can also be included as part of your application if it has been used to purchase other things such as a car or furniture.
Many times while applying for the tax credit there is a waiting list which requires applicants to be on-site at an auditor’s office. If you are on the list but do not have time to apply in person, here are some tips for you!
If you canapply online, do so! It takes less time for some people to apply via the website than it does to actually visit an office.
What is the deadline to file my tax return and claim the credit?
After November 1, 2013, new home buyers must file their tax return by February 18, 2014. If you purchase your home after November 1, 2013, you have the opportunity to claim the IRS Rental Tax Credit for up to $500 of expenses related to the purchase of your home.
The credit is not available until January 1 of the year following the year of purchase, so it cannot be applied until January of the following year.
If claimed at all, this is an excellent way to receive money back from Congress as this credit has been underused in recent years.